DePaul's endowment investments

​A letter from the Rev. Dennis H. Holtschneider, C.M., to the university community

May 23, 2014

On May 28, I will celebrate 25 years as a priest. For the past ten years, I have been particularly blessed to work among you, and I thank God for this opportunity every morning.

The great irony is that I am spending my 25th anniversary in Israel and the Palestinian territories, following the footsteps of Jesus Christ and visiting the many towns in which He lived and worked. This trip was scheduled long ago, and is unrelated to the current divestment question that has been debated on campus recently. But the irony that I am writing you from these holy and contested lands while responding to this student initiative is remarkable.

In preparation for my trip, I read Ari Shavit’s recent book “My Promised Land,” a book I recommend to you highly. It’s written by a man very proud of his family’s role in constructing a home for the diaspora Jews, and yet worried for the manner in which the country has drawn its boundaries and shaped its policy. His inner self wrestles with the current state of affairs; he sees no easy resolution and yet recognizes that a resolution is dearly needed by all.

I will leave the rest of the book to your discovery. I mention it because of the extraordinary way he holds within himself the complex concerns that so trouble this region of the world. Universities are much the same, for they are frequently places where conflicts troubling other peoples and parts of the world find local resonance. They exist in the very public crossroads of intellectual debate and social change, and we should never be surprised when we find ourselves considering these issues and how they shape our own policies, no matter how seemingly distant we are from the heart of the matter.

Here at DePaul, the conflict has taken a rather specific turn. Students have asked questions about our investments. These are the scholarship funds that generate earnings that can then be distributed to students to help them afford their education. Our students rely on these funds a great deal. In 2008, when the markets dropped precipitously, DePaul had less to give to students and, tragically, some students had to leave the university while others could not accept our admission invitations.

The student referendum (which passed earlier today 1,575 to 1,333) asked DePaul to reassign its investments away from a list of businesses the organizers perceive are assisting Israel’s strategic agenda. The request is problematic in a number of ways. First, of course, is because the political standoff at the root of this matter is deeply complicated. Neither side presently sees it is in its interest to accept the proposed compromises, and few within the U.S. foreign policy community consider a solution imminent.

The question is also complicated because, unlike universities with larger and more complex endowments, DePaul does not manage holdings in individual stocks. We use mutual funds, commingled trusts and investment managers, who, at their independent discretion, compile large assemblages of stocks in order to provide a more predictable return. These instruments contain stocks of hundreds or thousands of companies, which can change by the hour.

Some universities have turned in recent years toward a philosophy of socially-responsible investing. It is a simple concept — namely that an institution requires its managers to avoid purchasing stocks in companies that engage in business that defies some subjective criteria. It is not so simple in practice, however. What is socially responsible to one organization or set of interests may be objectionable to another. Even within an organization like DePaul, individuals may have differing conceptions of what is considered “socially responsible.” Assuming that we could come to consensus, the extent of a specific company’s involvement in a controversial matter may be tenuous at best, especially in cases where conglomerates consist of many companies, where only one small company in its portfolio may be of concern. The investment committee of DePaul’s board of trustees periodically looks at the current state of socially-responsible investing, and is scheduled to do so again next year. To date, the committee has found it, in practice, to be of questionable value, even if the purposes are laudable.

As for this specific referendum, I have previously made clear that university policy is not set by referendum and that the Fair Business Practices Committee is the appropriate university body to study and make a recommendation on this issue. I will recommend it to their fall agenda. This committee was established in 2000 and consists of faculty, staff and student representatives. I therefore encourage supporters of the referendum to present their case to the committee and encourage all other interested parties to do the same.

I am always proud when DePaul’s students take a personal interest in foreign affairs, for they know that issues that seem so very distant are not, in fact, all that distant in a globalized world. I respect those who stood outside the student center encouraging students to vote or who organized opportunities for others to learn more and discuss the issues dividing the Palestinian and Israeli people. I particularly respect those who did so with civility and kindness.

As I write, Pope Francis is expected here in Jerusalem this weekend. For the first time, the official papal delegation consists not of a pope alone, but a pope, an imam and a rabbi. As Pope Francis yet again sets aside convention and protocol in favor of actions that will unite a human community, I pray that all of us at DePaul will do the same. Thank you for advocating deeply for the needs of the communities you hold dear, and thank you for doing so with respect and the intent to find our way to a more peaceful world together.